Owens & Minor, Inc. (OMI) has reported a 15.48 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $27.10 million, or $0.45 a share in the quarter, compared with $32.07 million, or $0.51 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $31.58 million, or $0.52 a share compared with $35.13 million or $0.56 a share, a year ago.
Revenue during the quarter dropped 4.81 percent to $2,368.36 million from $2,487.91 million in the previous year period. Gross margin for the quarter contracted 10 basis points over the previous year period to 12.46 percent. Total expenses were 97.93 percent of quarterly revenues, up from 97.67 percent for the same period last year. That has resulted in a contraction of 26 basis points in operating margin to 2.07 percent.
Operating income for the quarter was $49.01 million, compared with $57.95 million in the previous year period.
However, the adjusted operating income for the quarter stood at $53.71 million compared to $63.10 million in the prior year period. At the same time, adjusted operating margin contracted 27 basis points in the quarter to 2.27 percent from 2.54 percent in the last year period.
"We had a solid year in 2016, driven by focused execution and the dedication of our teammates against a backdrop of challenging industry dynamics," said Cody Phipps, president & chief executive officer of Owens & Minor. "As we have discussed, we will continue to face headwinds throughout 2017. Our focus now is on executing our strategic plan to reposition our company for long-term success."
For fiscal year 2017, Owens & Minor, Inc. expects diluted earnings per share to be in the range of $1.75 to $1.85 on adjusted basis. Based on the initiatives in our new strategic plan and associated investments, the company is providing guidance for 2018 of $2.05 to $2.20 per diluted share on an adjusted basis (Non-GAAP).
Operating cash flow drops significantly
Owens & Minor, Inc. has generated cash of $186.93 million from operating activities during the year, down 30.66 percent or $82.66 million, when compared with the last year.
The company has spent $24.75 million cash to meet investing activities during the year as against cash outgo of $36.47 million in the last year. It has incurred net capital expenditure of $24.75 million on net basis during the year, down 32.15 percent or $11.73 million from year ago.
The company has spent $141.94 million cash to carry out financing activities during the year as against cash outgo of $124.23 million in the last year period.
Cash and cash equivalents stood at $185.49 million as on Dec. 31, 2016, up 15.20 percent or $24.47 million from $161.02 million on Dec. 31, 2015.
Working capital increases marginally
Owens & Minor, Inc. has recorded an increase in the working capital over the last year. It stood at $927.40 million as at Dec. 31, 2016, up 1.79 percent or $16.29 million from $911.11 million on Dec. 31, 2015. Current ratio was at 1.90 as on Dec. 31, 2016, up from 1.86 on Dec. 31, 2015.
Cash conversion cycle (CCC) was almost stable at 15 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 12 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 20 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 17 days for the quarter from 15 for the same period last year.
Debt remains almost stable
Owens & Minor, Inc. has recorded a decline in total debt over the last one year. It stood at $564.58 million as on Dec. 31, 2016, down 0.69 percent or $3.91 million from $568.50 million on Dec. 31, 2015. Owens & Minor, Inc. has recorded a decline in long-term debt over the last one year. It stood at $564.58 million as on Dec. 31, 2016, down 0.69 percent or $3.91 million from $568.50 million on Dec. 31, 2015. Total debt was 20.77 percent of total assets as on Dec. 31, 2016, compared with 20.47 percent on Dec. 31, 2015. Debt to equity ratio was at 0.59 as on Dec. 31, 2016, up from 0.57 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 7.28 for the quarter from 8.47 for the same period last year.
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